It’s been a few weeks since my last bitcoin write-up, which means it’s time to revisit the chart. I’ve been doing these more often lately because of the elevated risks I see in this incredible asset, and I want everyone to be aware of them. Right now, there are several key levels worth paying close attention to and we will discuss them today in depth. Recently I reviewed bitcoin’s correlations with M2 money supply, the DXY, equities, and the Elliott Wave counts—all of which suggest upside but also warned that we could be nearing the end of this bull market.

As of the most recent all-time high, one Elliott Wave count is now complete and suggests the top may already be in. We’re also seeing a bull trap and double top pattern similar to the one that marked the end of the 2021 cycle. In this cycle, every bull trap has triggered at least a 22% drawdown, which would pull price back to the 50-week EMA—a level that has consistently acted as a key bull market support. The only moving average I’ve found to be slightly more reliable is the 100-SMA on the 3-day chart. Currently, the 50-week EMA is near $95,000, while the 100-SMA on the 3D chart sits around $100,400. Bitcoin has held above both since early 2023, when it finally reclaimed them after nearly a year-long bear market.

BTC 3 Day Chart

September has historically been a weak month for BTC, and this one is setting up no differently. The current double top is playing out with a clean neckline retest on September 3rd. The double top measured move targets the $95k–$100k range. This is where multiple supports converge: the 50-week EMA, the 100-SMA on the 3D chart, the YTD anchored VWAP, and the cycle trendline that has held this entire bull market.

As I’ve said before, there are still plenty of reasons to expect higher prices—after all, the September lull has historically set the stage for the next leg to new all-time highs. That said, price action remains the ultimate judge. If bitcoin starts closing below the 50-week EMA, the 100-SMA on the 3-day chart, and that trendline support, the odds of a deeper bearish shift rise sharply. Quick wicks below key levels are normal—bitcoin often flushes lower in liquidity sweeps before snapping back, shaking out leveraged traders along the way. The critical point for the bulls is that bitcoin must reclaim these supports quickly whenever they’re broken.

Should we see a decisive close below $95,000, one last key level comes into play: the 20-month EMA. This moving average has historically defined bull vs. bear cycles and currently sits around $85,000. That means BTC could drop about 30% from its ATH and still technically remain in a bull market. But if that level breaks, it would “confirm” a bear market as the Elliot Wave counts would also point towards a more bearish outlook at that point. By the time we get to the 20-month EMA, bitcoin would already be well below all major bull market supports, signaling that this bull run is truly over.

For now I still plan on trading bitcoin if it drops back into the major support region of $100,000- $95,000. If we break and close below the 50-week EMA, I will protect and hedge my position. Even though risk is elevated here more than it has been at any time in this cycle since the launch of the ETF’s there still is a decent risk vs reward if BTC drops back into the key support levels. After each post halving September low BTC has rallied strongly into a new all-time high and my targets for that push would be up into the $130,000 or higher range. That gives a 30% upside from the key support levels and is something I plan on at least taking a shot on.

BTC Elliot Wave

Just for fun—since I know many of you are wondering—where do we go if bitcoin breaks below all the key supports we just covered? The truth is no one knows, and countless factors can shape where the eventual bottom lands. That said, there are a few signals I always monitor closely. The first is RSI. As many of you know, I have a rule: when daily RSI hits 27 I buy for my long-term holdings and simply wait for new highs. During the last bear market, this signal only triggered three times before the final bottom which also gave a buy signal. These bear market entries broke even within a year, and today the average cost of those buys is up over 300%.

BTC Oversold Daily RSI

To help identify the major bear market cycle bottom—not just the short-term lows flagged by the daily RSI—I zoom out to the monthly RSI. A dip into the 40s on the monthly has historically been a strong signal that a cycle bottom is approaching. Another thing I track closely is the massive parallel channel bitcoin has traded in since 2017. The midline of that channel has acted as a strong resistance this entire bull run, which gives even more confirmation that the channel is important.  Unless BTC breaks through that midline with conviction and volume, I’ll assume it remains resistance for the rest of this bull run. Currently, the lower boundary of the channel is near $50,000, though that level will rise over time and it would take time to get down there. If bitcoin pushes into the $130,000–$150,000 range over the next several months, that lower trendline will climb to $70,000 or higher.

Historically, bear markets have taken about a year to play out, with drops as deep as 80%. I don’t expect that extreme of a drop this cycle given institutional adoption and the presence of ETFs, but nothing is impossible—especially if a large holder like MSTR were forced to sell. Still, since ETFs launched over 600 days ago, bitcoin’s chart behavior has changed: price has advanced in a more controlled, though still volatile (by equity standards), manner. I expect that same dynamic to mute the downside volatility as well.